to the contingency fund are components of capital.They can be used in the future to pay off unexpected expenses.The reserve fund of the organization formed by means of real net income and recognized in the corresponding balance sheet item - 82 "reserve capital".Losses may occur at any time, for objective or subjective reasons.
Reserve Fund - is the capital of which is formed strictly on the basis of constituent documents of the organization and regulations for the funds, representing part of the net profit.Information about it serves as an indicator of the financial condition of the company.For joint-stock company Fund should be formed according to the share capital, is replenished every year he has a minimum of 5 percent of net profit.Its size can be adjusted upwards if there is a corresponding resolution meeting.In addition, if the share capital is changed, then it decreases or increases the amount of reserves.
Limited Liability Company is not legally obliged to have a reserve fund, in contrast to the stock, but in our judgment it can generate.These funds can be directed to the social development of the enterprise, to replenish capital, if necessary, payment of dividends, as well as unforeseen costs associated with the onset of the crisis.
Reserve funds of JSC can be used to cover the costs:
- a loss of the enterprise;
- with the need to pay dividends;
- the liquidation of the company (for payment of debt);
- other circumstances which are fixed by law and regulations of the organization.
Order means is the responsibility of a board of directors or supervisory board.If there are losses, they are sent to their repayment, in whole or in part.Cash must be kept available, but at the same time reliable financial instruments.Experts do not recommend to create a large reserve fund, since it takes a significant portion of the capital of the enterprise and profits from its use can be quite high.These funds can not be used in the present tense and not bring income in the future.
The reserve fund of the enterprise implies additional capital.It includes the total amount of growth in the organization's property arising due to revaluation of share premium and non-current assets received free of charge and used to cover losses arising.
The company also used the concept of provision for doubtful debts.Its formation is due to the possibility of losses from outstanding bad or doubtful debts.
the reserve fund
Reserve funds are formed on the basis of statutory documents, so you should take into account the presence of the following stages:
- First, you must define goals, according to which the funds will be distributed later.
- Secondly, these objectives need to be made to the charter of the enterprise.Also it is necessary to fix the minimum size of both the fund and the amount of deductions to him.
- Thirdly, there should be a meeting of the founders, which address issues of changes in the amounts of deductions and order of their spending.The meeting shall be recorded and certified, he published the results of the corresponding order.
- Fourth, in the balance sheet reflects the net profit and the funds allocated to the reserve fund.Then you can make the relevant operations related to the expenditure of any of its completion, carrying out wiring in the balance properly.
